Sandisk Corp. (NASDAQ:SNDK) fell about 10% on Friday as a broader tech sell-off weighed on high-growth stocks. The Nasdaq Composite fell 2.85%, while the S&P 500 lost 1.41%.
Despite this decline, Sandisk continues to benefit from stronger data center demand, higher pricing and better long-term revenue visibility as artificial intelligence drives storage demand.
Rosenblatt analyst Kevin Cassidy maintained a Buy rating and price forecast of $2,400, based on 10 times his non-GAAP earnings per share estimate for fiscal 2028.
Demand for data centers fuels growth
Cassidy said Sandisk reported stronger-than-expected first-quarter fiscal results, with revenue up 378% year-over-year and 23% sequentially to $11.03 billion. Revenue topped its estimate of $10.55 billion and the consensus of $10.72 billion.
Adjusted earnings came in at $49.51 per share, beating Cassidy’s estimate of $45.80 and the consensus of $46.67.
Data center revenue jumped 1,682% year-over-year and 61% sequentially to $4.80 billion, making it the biggest growth driver.
Sandisk also reported a non-GAAP gross margin of 85.1% and adjusted free cash flow of $5.7 billion.
Long-term contracts increase revenue visibility
Cassidy said Sandisk’s new business model deals are working better than expected.
The company has agreements with eight customers covering approximately 50% of FY 2027 bit production and approximately two-thirds of FY 2028 production. The contracts represent $93.9 billion in minimum committed revenue.
Cassidy said Sandisk’s portfolio of potential new business model deals exceeded its available supply through the end of the decade, signaling sustained demand for its memory products.
He added that 95% of existing deals are with investment grade clients, building confidence in long-term revenue visibility.
Cassidy said demand from the potential deals exceeded available supply through the end of the decade. He expects contract coverage to increase as Sandisk signs new customers and extends existing agreements.
AI creates new storage opportunities
Cassidy identified AI inference as another significant growth opportunity.
He expects the increasing adoption of triple-tier (TLC) and quad-tier (QLC) enterprise SSDs, along with key-value (KV) cache tiering, to increase the demand for NAND flash storage in data centers.
Sandisk expects KV cache to account for about a third of the AI data center flash market by the end of the decade.
Cassidy also highlighted the company’s BiCS technology roadmap and emerging High-Bandwidth Flash (HBF) technology, with the first HBF samples expected in 2027.
Analyst raises earnings forecast
Cassidy raised its second-quarter revenue estimate to $12.40 billion from $12.20 billion and its adjusted EPS estimate to $56.90 from $52.98.
For fiscal 2027, it raised its revenue forecast to $49.48 billion from $48.80 billion and its adjusted EPS forecast to $221.28 from $210.
For fiscal 2028, Cassidy maintained its revenue estimate of $60 billion, but increased its adjusted EPS forecast by $240 to $247.71.
Sandisk forecast second-quarter revenue of $12.2 billion to $12.6 billion and adjusted EPS of $55 billion to $57, beating Cassidy’s previous estimates.
Cassidy also said Sandisk expects data center demand for NAND bits to increase by about 40% in 2027. However, the company plans to maintain disciplined growth in bit production in the mid-to-teens rather than aggressively increasing capacity.
SNDK Price Action: Sandisk shares were down 10.21% at $1,194.29 at press time Friday, according to data from Benzinga Pro.
Image via Shutterstock
News and market data powered by Benzinga APIs
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Gn bussni
